EU temporarily suspends UK carbon permit processes ahead of Brexit

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FILE PHOTO: The Union Flag and a European Union flag fly near the Elizabeth Tower, housing the Big Ben bell, during the anti-Brexit 'People's March for Europe', in Parliament Square in central London, Britain September 9, 2017. REUTERS/Tolga Akmen/File Photo

LONDON (Reuters) - The European Commission said on Thursday it has temporarily suspended emissions trading system processes related to Britain as from Jan. 1 next year until there is clarity on the terms of the country’s departure from the EU.

As a result, from Jan. 1 Britain will not be able to auction carbon permits, allocate them for free to operators, or exchange international credits for as long as the suspension remains in place, the Commission said.

“To prevent the temporary issuance and circulation of marked permits until there is clarity on whether or not a withdrawal agreement will be ratified and enter into force, the Commission has decided... to temporarily suspend the acceptance by the Union Registry of all processes for the UK relating to free allocation, auctioning and the exchange of international credits,” the Commission said in a statement.

From January, any carbon permits issued by Britain will have to be identified by a country code (“marked”).

The Commission said the transfers of permits already in circulation in and out of accounts held by UK operators will not be affected by the suspension.

Britain already said on Wednesday that it will not be auctioning permits in the first quarter next year.

If a withdrawal agreement on Britain’s exit from the EU is ratified the suspension will be lifted, the Commission said.

This amendment to the Registry Regulation has been submitted to the European Parliament and the European Council for approval.